President Trump is expected to hammer Democrats on the economy in his State of the Union address, drawing a contrast between the current economic expansion, job growth, and low unemployment figures and what he believes are ruinous economic policies proposed by the Democratic Party’s presidential candidates.
Trump’s remarks will also make his case for reelection, with the president touting an “inclusive,” opportunity-rich economy and an “optimistic vision” for the future, a senior administration official told reporters in a briefing phone call. “The speech is going to have a very optimistic tone,” the official said.
Trump’s remarks may preview middle-class tax cuts, a salve for voters who believed Trump’s signature 2017 tax bill helped corporations and the wealthy. Aides told Politico that Trump’s pitch to better manage the economy than a Democrat will benefit from some Democratic presidential candidates’ expanded social welfare and healthcare proposals.
“He’s going to talk about increases in household income compared to Obama and the fact that a tight labor market is a big benefit to workers,” conservative economist and onetime Trump Federal Reserve Board pick Stephen Moore told Politico. “He’s going to pitch the argument that Democrats are going to raise taxes and he’s going to lower them. He didn’t hit the 3% GDP target, so that’s a promise not met. But I don’t think that really matters. The economy is good, and people feel it.”
Critics will point to the president’s failure to deliver on a number of his administration’s boldest promises. Treasury Secretary Steven Mnuchin claimed in an interview in Davos last month that the 2017 tax cuts would pay for themselves, despite Treasury data showing otherwise last October. Mnuchin also defended government spending increases under Trump. “The president felt it was important to rebuild the military,” Mnuchin said.
Business investment contracted between April and December 2019, despite wage gains and a demand from consumers. Forecasters are predicting a GDP growth rate of about 2% this year.
In 2017, Trump predicted GDP growth at 4%, 5%, or 6% during his presidency, but growth has not yet hit 4% on an annual basis. It grew at 3.2% in the first quarter of 2019 but settled at 2.3% for the year, and though Trump promised to wipe out the national debt on the campaign trail, a late January forecast by the Congressional Budget Office said it was likely to exceed $1 trillion “indefinitely.”
Impeachment hasn’t hurt Wall Street as Trump predicted in a September tweet, but the trade war with China, the recent coronavirus outbreak, and the prospect of war with Iran after the killing of Iranian Gen. Qassem Soleimani did impart a few short-lived dings.
